Facts on Printing Checks

After the California gold rush of 1849, Wells Fargo developed a system of using checks or drafts to exchange money with eastern banks. This eliminated the need to move large quantities of gold across the states, thus reducing robberies, time and expenses. Checks became a common and accepted method of payment by 1913. The Federal Reserve established check clearing centers that year as well. In 1952, 8 billion checks were written, issued from 47 million checking accounts.

History

In 1961, MICR, or Magnetic Ink Character Recognition, received a patent that lead to machine automation of check processing within the banking industry.

Function

Checks served as the primary source of legal tender exchange for many decades before the credit and debit cards became popular and widely accepted.

Identification

Every check has a 9-digit routing and transit number printed on it with MICR, indicating the Federal Reserves processing center, individual account number and a check number.

Benefits

Carrying a checkbook is safer, less cumbersome and easier for paying large amounts than cash, and the canceled check serves as a receipt and proof of payment for the payer.

Types

Check types include order checks, payable to the order of; bearer checks, payable to the bearer of the check; and counter checks. All types of checks are available in various designs and formats.

Resources

• The History of the Check
• History of Cheques in the UK